Representatives from local small business lending agencies explained the importance of cash flow and the resources available when seeking a loan in the second of a three-part Filling the Finance Gap series.
Entrepreneurs listened to a presentation March 24 from Buffalo-based community development financial institutions, including representatives from Westminster Economic Development Initiative, Inc., Excelsior Growth Fund, Erie County IDA, and PathStone Enterprise Center.
Attendees learned about the dos and don’ts of cash flow budgeting, presented by Raisa Dibble and Joshua Brenner, economic development specialists at WEDI, located on Grant Street on Buffalo’s West Side.
There are three types of cash flow, Brenner and Dibble explained. Operational, which accounts for money received and spent from business-related activities and payroll; investment, which involves the buying and selling of assets; and financing, which is cash received or spent through debt.
Brenner and Dibble also advised those seeking to start a business to list assumptions in their cash flow plan, understand the costs of goods sold, estimate taxes, and use data and research before making any assumptions.
Audience members attending the talk at the Community Action Organization Center on Fillmore Avenue were given a sample spreadsheet to track business expenses and revenue. Entrepreneurs in the audience had business interests ranging from construction and vending to real estate, kids entertainment, and a beauty salon.
“Break everything down because people looking at your cash flow don’t know your business,” WEDI representatives advised in the presentation. They also recommended that entrepreneurs do a thorough scenario analysis to make sure there are margins to build on as variables change, and that they leave themselves "wiggle room."
“You want to be able to catch yourself,” Brenner said.
Audience members also learned that resources to manage business accounting are available through the Small Business Administration at SBA.gov, as well as through Buffalo’s SCORE chapter, and that there are community organizations that can assist them in developing a business plan or building an accurate account of expenses.
Representatives from the participating lending agencies explained their loan products, for whom they are best suited, and how they differ from each other and from a loan one might receive at a bank.
“We’re really looking at cash flow to see what the bottom line is,” PathStone business development officer Jonathon Ling said. “We don’t lend to people who don’t have sufficient cash flow in their business plan.”
The third and final presentation in the series will take place April 23 from 5:30 to 6:30 p.m. at the West Side Bazaar, 25 Grant St. Its subject will be “Scaling Up Your Business,” with an opportunity to meet and network with community business lenders. Interested participants can register for the free event at
wedibuffalo.org/lendingoptions or by calling 716-436-2977.